A guide to family health insurance

When a family member is sick the last thing you want to have to worry about is paying the medical bills. That’s why choosing the right health insurance for your family is so important.

If you have a family, private health insurance is often most important. You not only have adults to think about, but there are also growing, active, accident-prone children in the mix. You need to provide the best medical cover for them.

The good news is that regardless of how many children you have, families still pay the same health insurance premium as couples with no kids - so essentially, all children are covered for free.

Let’s take a quick look at loading, surcharges, and costs of family health insurance.

Lifetime health cover and age loading

Lifetime Health Cover affects only the adults of the family.

  • If there is any age loading applied to your family health insurance premium, it will be the average of the two age loadings between the parents.
  • If both of you took out health insurance before 1 July following your respective 31st birthdays and have kept some level of hospital cover since then, you won't need to worry about an age loading.

Quick tip: If one or both of you haven't had continuous cover since that time, you can calculate your loading with a simple formula.

[partner 1's age loading] + [partner 2's age loading] / 2 = the average age loading


Mary has no age loading because she took out health insurance early in life, but John has an age loading of 10%. The average of their two loadings is 5%, so they will pay 5% on top of the base rate premium for their family cover.

Medicare levy surcharge for families

The current Medicare Levy Surcharge threshold for families is $180,000 (as of 1 July 2014). That means if your combined incomes are over $180,000 and you don't have hospital cover, you'll be charged an extra 1%-1.5% in tax in the form of the Medicare Levy Surcharge. This is on top of the 2% Medicare Levy that you already pay.

This threshold is indexed, and will adjust each financial year.

For families with more than one child, the threshold rises by $1,500 for each child after the first.

Quick tip: You can avoid this extra tax by simply taking out private health insurance with a hospital cover component.

Dependents, student dependents and extended family cover

  • Dependents are defined as unmarried children under a certain age, and all dependent children are covered under your family health insurance policy up to the age specified by your health fund (usually between 18-21) at no extra charge.
  • Student dependents are children above the dependent age who are studying full time at a recognised educational institution or in a recognised traineeship or apprenticeship.
  • Health funds will generally also cover student dependents free of charge until the age of 25 provided they are not married or in a de facto relationship and do not earn over a set income threshold.
  • Extended family cover may be required when your unmarried child is no longer studying and doesn't fit the criteria for a dependent, but you still want to cover them under your family health insurance policy.

Quick tip: Many health funds offer extended family cover but they tend to cost around 25% more than regular family cover. So make sure you check with your health fund first.

The benefits of private health insurance for families

Of course, the greatest benefit of private health insurance for families is knowing that all members of your family are covered for medical mishaps that may arise in life.

Quick tip: Check with your health fund - some health funds throw in extra services for families like free dental checkups for the kids (with no gap), and no excess or co-payments when children are admitted to hospital.

Compare family health insurance policies with Choosi

Choosi lets you compare health insurance products that provide cover for you, your partner and your kids. so that you can get the best value cover for your family’s needs.

To get the best value cover for your family’s needs, call us on 13 55 55 and get a quote today!

These articles are provided as reference material to allow more informed decision making, but are not intended as being a complete source of information on any topic. All readers should make their own independent analysis on the topic to make sure they have considered the aspects that are important to them.